Investors with an interest in Oil and Gas - Exploration and Production - United States stocks have likely encountered both Laredo Petroleum and Pioneer Natural Resources . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Laredo Petroleum and Pioneer Natural Resources have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
LPI currently has a forward P/E ratio of 4.86, while PXD has a forward P/E of 21.65. We also note that LPI has a PEG ratio of 0.97. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PXD currently has a PEG ratio of 1.58.
Another notable valuation metric for LPI is its P/B ratio of 1.32. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PXD has a P/B of 2.23.
These are just a few of the metrics contributing to LPI's Value grade of A and PXD's Value grade of C.
Both LPI and PXD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LPI is the superior value option right now.
Image: Bigstock
LPI vs. PXD: Which Stock Should Value Investors Buy Now?
Investors with an interest in Oil and Gas - Exploration and Production - United States stocks have likely encountered both Laredo Petroleum and Pioneer Natural Resources . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Laredo Petroleum and Pioneer Natural Resources have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
LPI currently has a forward P/E ratio of 4.86, while PXD has a forward P/E of 21.65. We also note that LPI has a PEG ratio of 0.97. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PXD currently has a PEG ratio of 1.58.
Another notable valuation metric for LPI is its P/B ratio of 1.32. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PXD has a P/B of 2.23.
These are just a few of the metrics contributing to LPI's Value grade of A and PXD's Value grade of C.
Both LPI and PXD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LPI is the superior value option right now.